1. Field of the Invention
The present invention generally relates to management of securities portfolios used to provide distributions to retirees or to trust income beneficiaries. More specifically, the present invention relates to using credit lines to enhance the durability and increase the yield of these portfolios.
2. Related Art
For many current and soon-to-be retirees, social security benefits alone are not sufficient to cover all the expected expenses that are to be incurred during their retirement. For many trust income beneficiaries, increased income is desired but cannot be obtained without diminishing the amount left for the remainder beneficiaries. In addition, the anticipated life expectancy of retirees and beneficiaries has generally increased due to many factors. Therefore, retirees, beneficiaries and trustees are facing increasing pressure to increase the yields from their securities portfolios while making such portfolios last as long as possible. Conventional home equity credit lines (and other credit lines) are sometimes used to supplement retirement income or trust income, but there does not seem to be any systematic method to coordinate these credit lines with the retiree's or beneficiary's securities portfolio. Furthermore, there does not seem to be any systematic method to determine whether or when to use a reverse mortgage to replace a home equity credit line or other credit line. Reverse mortgages are sometimes considered as an alternative source of retirement distributions, although there does not seem to be any consideration of them as alternatives or supplements to trust income. In any case, conventional wisdom holds that reverse mortgages should be used as a last resort, to be drawn upon only after other resources, such as securities portfolios, have been largely or completely exhausted.
Hence, it would be desirable to provide a method and system to enhance the durability and increase the yield of securities portfolios used to provide distributions to retirees or beneficiaries, and in the case of such portfolios held by trusts, to increase, or at least maintain, the value of the trust remainder. Furthermore, it would be desirable to include in the method and system a way to use various kinds of credit lines, comprising conventional home equity credit lines and reverse mortgage credit lines, to provide the greatest economic advantage to the retiree or trust beneficiary while also providing the greatest flexibility and preservation of options for the longest period of time during the retiree's or beneficiary's remaining lifetime.